In the above NYTimes photo, the character to the left is unidentified. The one to the right is Ben Bernanke, who in a lecture at the London School of Economics, said: “More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets.”
The guy he is sitting with is one Gordon Brown, otherwise known as the Prime Minister of the United Kingdom.
That the Gray Lady did not see fit to let us know who he is, and did let us know about Mr Bernanke (Chairman of the Federal Reserve, actually a private bank which to most people appears to be a governmental public bank but is not), would seem to hint at a certain pecking order.
What Mr. Bernanke said is summarized in this headline:
Banks Are in Need of Even More Bailout Money
These are banks the CEO’s of which make umpteen millions each year, dish themselves bonuses, and who, by any reckoning, all failed, and failed miserably. Well, they failed if the measure is in how their banks performed in social, public terms, and in terms of their shareholders. If, however, the measure is how well did they, personally, do, then they were successful beyond anyone’s wildest dreams. We notice that as they send their emissary to beg for more money, none of them have resigned, been fired, or hauled out back and shot. Nope, that’s not the way market-economy capitalism works. In Market Economy capitalism, the top echelons virtually never drop, get fired, lose income, or are otherwise inconvenienced. We pay them millions and billions because they are the brightest of the brightest, and if we didn’t shell out to them these massive sums, they’d go elsewhere. And the system would collapse!
So they keep suckering us, while hiding off to their 10th house (remember how many houses, condo’s etc. Mr McCain had?) so far unmolested by the crack of a 30 aught 06 as they go.
Mr. Brown sits at the knee of the Chairman of the Fed because the UK, which until quite recently was flush with the rustle of flowing Sterling, is now shuddering to a halt. All its eggs were in the “financial services” basket. They don’t make anything anymore in the UK (sound familiar?) aside from the odd airplane, some military items, and “financial servicing.” So Mr Brown, formerly the Exchequer of the formerly Blairite cool UK, is behaving, as Mr Blair did with regard to Bush’s Iraqi game, like a nice lap dog, hoping somehow the US Federal Reserve head will help bail him out.
As far as Treasury Secretary Hank Paulson is concerned, the much-maligned $700 billion bailout of the financial industry — known to acronym fans as TARP (Troubled Asset Relief Program) — is a success.
Mr Paulson, when queried just what did this expenditure accomplish, said
“the TED spread” had retreated significantly from the dangerously high levels it had reached at the epicenter of the crisis.
I note for you that the TED spread is not the same as the Craig wide-stance spread of Minneapolis-St.Paul fame. Nope and not.
The continued high levels of short term spreads compared to their very stable levels of the past suggest that the infusion of billions of dollars into the banks forestalled immediate collapse, as it necessarily would, but has not affected liquidity in credit markets or reassured the capital markets that large financial institutions are strong credits.
Got that? Hence the hands out “gimme more” of the world’s Bernanke’s.
And so the matter of the discipline of the market, or “moral risk” is flushed down the toilet, and these total fuck-ups, who dress in fancy clothes, eat well, have multiple homes, private jets, etc. etc. etc., now without a blush of shame, ask those recently evicted from their homes, left jobless, and otherwise abused by the magical wonderful Market Economy, to bail them out so they can continue their way of life.
Or, Socialism for the Very Rich When Necessary. Otherwise, in the language of our soon departing Vice President, “Go fuck yourself.”
And these people constantly ask for “respect.”
Timothy F. Geithner, the president-elect’s choice for Treasury secretary, failed to pay more than $34,000 in taxes early this decade
But, not to worry, it was just a little clerical error. The government claims that the median US income is $50,233.00, but I would be as skeptical of that figure as its one for unemployment, which allegedly is 7.3% last month, but is far more likely to be something like 15%. I would bet a reasonable and accurate figure on the median income would land more like $35,000. So our incoming Treasury Secretary, presumably someone highly acquainted with numbers, tax laws, and such, managed to mess up payment in taxes more or less equivalent to what a normal American earns in a year. He’d be putative head of the IRS. He also had, apparently like many quite rich people, a “house-worker” of unknown country working, uh, without proper immigration papers. A harbinger of things to come? Maybe Mr Obama can find a more suitable candidate for this office – or is it that all those in the “financial services” sector find themselves above the law, or perhaps they have “other priorities” than complying with the laws they are supposed to manage?
[Update, Jan 15 2009]
Also, Obama’s choice to oversee the IRS flubbed his own tax returns – some of which he had personally prepared – to the tune of $42,700 in back taxes and penalties.
And Geithner decided to pay more than half that amount — $26,000 — only after Obama decided to nominate him, according to finance committee documents.
Bank of America is struggling to absorb Merrill Lynch & Co, which it bought on Jan 1. Merrill Lynch suffered significant losses in the fourth quarter.
Bank of America told the government in December that it was unlikely to complete its purchase of Merrill Lynch because of the losses, a person familiar with the matter said. The bank and the government have been speaking since then.
Bank of America and Merrill received $25 billion in October under the government’s Troubled Asset Relief Program, as did Citigroup <C.N>. Citi required an additional $20 billion of capital in November.
So having received a mere 25 billion to help out, BofA went to buy Merrill Lynch, and had some problems in this expansion, and now they need more newly minute your-future-debt. Willy Sutton’s response to why he robbed banks is exactly why bankers, the biggest robbers of all, work there: “Because that’s where the money is.”